Question 1

All securities involve risk of some kind.

Accepted Answer

A) True 
 B)False

Question 2

Sunshine Mining Bonds have a $1,000 face value,pay $95 annual interest,mature in 2020,and are currently quoted at $1,302.50.The coupon rate of interest is:

Accepted Answer

A)  8.500%. 
B)  9.500%. 
C)  13.025%. 
D)  13.052%. 
E)  can't tell from the information given 
A)  8.500%. 
B)  9.500%. 
C)  13.025%. 
D)  13.052%. 
E)  can't tell from the information given

Question 3

Bonds are issued by:

Accepted Answer

A)  corporations,state,local and federal governments. 
B)  state and local governments and partnerships. 
C)  corporations and partnerships. 
D)  Moodys and Standard and Poor's. 
E)  none of these 
A)  corporations,state,local and federal governments. 
B)  state and local governments and partnerships. 
C)  corporations and partnerships. 
D)  Moodys and Standard and Poor's. 
E)  none of these

Question 4

The callable feature of a bond protects the issuer when current rates are falling.

Accepted Answer

A) True 
 B)False

Question 5

The yields on municipal bonds are usually higher than the returns available from fully taxable issues.

Accepted Answer

A) True 
 B)False

Question 6

If the current price of an investment increases,the investment's annual yield will decrease.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is most likely to occur immediately following the announcement that the rating on a corporate bond has been lowered to junk status?

Accepted Answer

A)  The yield-to-maturity on the bond will decline. 
B)  The price of the bond will decline. 
C)  The price of the bond will increase. 
D)  More than one of the above 
E)  None of the above 
A)  The yield-to-maturity on the bond will decline. 
B)  The price of the bond will decline. 
C)  The price of the bond will increase. 
D)  More than one of the above 
E)  None of the above

Question 8

Bond prices and market interest rates are _____ related.

Accepted Answer

A)  inversely 
B)  directly 
C)  slightly 
D)  positively 
E)  none of the above 
A)  inversely 
B)  directly 
C)  slightly 
D)  positively 
E)  none of the above

Question 9

Companies whose earnings have increased at an above-average level over the recent past are called:

Accepted Answer

A)  cyclical companies. 
B)  growth companies. 
C)  income companies. 
D)  speculative companies. 
E)  defensive companies. 
A)  cyclical companies. 
B)  growth companies. 
C)  income companies. 
D)  speculative companies. 
E)  defensive companies.

Question 10

The minimum rate of return you would like to receive in compensation for the amount of risk you have assumed is the:

Accepted Answer

A)  desired rate of return. 
B)  actual rate of return. 
C)  exact rate of return. 
D)  approximate yield. 
E)  none of these 
A)  desired rate of return. 
B)  actual rate of return. 
C)  exact rate of return. 
D)  approximate yield. 
E)  none of these

Question 11

Bonds provide for investment return primarily in the form of growth.

Accepted Answer

A) True 
 B)False

Question 12

When a bond is sold between coupon payment dates,the buyer pays the seller for the accrued interest.

Accepted Answer

A) True 
 B)False

Question 13

Stocks with high betas will have larger price gains and losses than those with low betas.

Accepted Answer

A) True 
 B)False

Question 14

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement.
-You would expect a higher rate of interest from a bond with a [AAA | C] bond rating.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 15

Compound interest is a very important concept when evaluating the return on an investment you plan to hold for a long time.

Accepted Answer

A) True 
 B)False

Question 16

Event risk occurs when something substantial happens to a company that has an immediate impact on its financial condition.

Accepted Answer

A) True 
 B)False

Question 17

A company has a beta of 1.0; if the market goes down by 8%,the value of the company's stock will:

Accepted Answer

A)  increase by 8%. 
B)  decrease by 8%. 
C)  increase by 1%. 
D)  decrease by 1%. 
E)  none of these 
A)  increase by 8%. 
B)  decrease by 8%. 
C)  increase by 1%. 
D)  decrease by 1%. 
E)  none of these

Question 18

Only the strongest,most stable and safe-return companies can be called:

Accepted Answer

A)  blue-chip stocks. 
B)  growth companies. 
C)  income stocks. 
D)  defensive stocks. 
E)  cyclical stocks. 
A)  blue-chip stocks. 
B)  growth companies. 
C)  income stocks. 
D)  defensive stocks. 
E)  cyclical stocks.

Question 19

Earnings per share (EPS)tell the stockholder the amount of dividend earned.

Accepted Answer

A) True 
 B)False

Question 20

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement.
-The issuer of your corporate bond has the right to retire it before maturity.You have a [callable | puttable] bond.

Accepted Answer

The answer of Choose the word or phrase in [...

All securities involve risk of some kind.

Sunshine Mining Bonds have a $1,000 face value,pay $95 annual interest,mature in 2020,and are currently quoted at $1,302.50.The coupon rate of interest is:

Bonds are issued by:

The callable feature of a bond protects the issuer when current rates are falling.

The yields on municipal bonds are usually higher than the returns available from fully taxable issues.

If the current price of an investment increases,the investment's annual yield will decrease.

Which of the following is most likely to occur immediately following the announcement that the rating on a corporate bond has been lowered to junk status?

Bond prices and market interest rates are _____ related.

Companies whose earnings have increased at an above-average level over the recent past are called:

The minimum rate of return you would like to receive in compensation for the amount of risk you have assumed is the:

Bonds provide for investment return primarily in the form of growth.

When a bond is sold between coupon payment dates,the buyer pays the seller for the accrued interest.

Stocks with high betas will have larger price gains and losses than those with low betas.

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement. -You would expect a higher rate of interest from a bond with a [AAA | C] bond rating.

Compound interest is a very important concept when evaluating the return on an investment you plan to hold for a long time.

Event risk occurs when something substantial happens to a company that has an immediate impact on its financial condition.

A company has a beta of 1.0; if the market goes down by 8%,the value of the company's stock will:

Only the strongest,most stable and safe-return companies can be called:

Earnings per share (EPS)tell the stockholder the amount of dividend earned.

Understanding the Financial Planning Process

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Mutual Funds

Planning for Retirement

Preserving Your Estate

Filters

Exam 12: Investing in Stocks and Bonds

All securities involve risk of some kind.

Sunshine Mining Bonds have a $1,000 face value,pay $95 annual interest,mature in 2020,and are currently quoted at $1,302.50.The coupon rate of interest is:

Bonds are issued by:

The callable feature of a bond protects the issuer when current rates are falling.

The yields on municipal bonds are usually higher than the returns available from fully taxable issues.

If the current price of an investment increases,the investment's annual yield will decrease.

Which of the following is most likely to occur immediately following the announcement that the rating on a corporate bond has been lowered to junk status?

Bond prices and market interest rates are _____ related.

Companies whose earnings have increased at an above-average level over the recent past are called:

The minimum rate of return you would like to receive in compensation for the amount of risk you have assumed is the:

Bonds provide for investment return primarily in the form of growth.

When a bond is sold between coupon payment dates,the buyer pays the seller for the accrued interest.

Stocks with high betas will have larger price gains and losses than those with low betas.

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement. -You would expect a higher rate of interest from a bond with a [AAA | C] bond rating.

Compound interest is a very important concept when evaluating the return on an investment you plan to hold for a long time.

Event risk occurs when something substantial happens to a company that has an immediate impact on its financial condition.

A company has a beta of 1.0; if the market goes down by 8%,the value of the company's stock will:

Only the strongest,most stable and safe-return companies can be called:

Earnings per share (EPS)tell the stockholder the amount of dividend earned.

Understanding the Financial Planning Process

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Mutual Funds

Planning for Retirement

Preserving Your Estate

Filters